On June 30, 2017, Adilide, Inc discarded equipment costing $40,000
Accumulated Depreciation as of December 31, 2016, was $25,000. Assume annual depreciation on the equipment is $2,500. Prepare the journal entries for the 2017 depreciation expense and for the disposal of the equipment.
What will be an ideal response
Depreciation Expense—Equipment 1,250
Accumulated Depreciation—Equipment 1,250
Accumulated Depreciation** 26,250
Loss on Disposal* 13,750
Equipment 40,000
*Loss on disposal = $40,000 - $26,250
**Accumulated depreciation = $25,000 + ($2,500 x 6/12 ) = $25,000 + $1,250
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